How “The Angel” helped 15,000 people steal broadband

And how he got three years in jail.

The operation didn't make all that much money. After getting records from PayPal and the bank Washington Mutual, investigators estimated that Harris had pulled down $1.18 million in revenue. That sounds pretty good, but it covered 2005-2009; divided over those five years, that's just over $235,000 a year. And he sold legitimate, non-modified cable modems, cables, and his own book, which have to be subtracted from that total. The total amount of the take due to fraud is therefore estimated at anywhere between $400,000 and $1 million—no one really knows—and out of that Harris had to pay his workers, especially his key coder.

In late 2009, the government filed an indictment against Harris in federal court and arrested him in Oregon in October. Despite the revenue from over four years of operations, Harris had no money to pay a lawyer and was assigned a public federal defender. It was unlikely to matter too much who he got as a lawyer, though, as the government quickly rounded up and turned nearly everyone else involved with TCNiSO.

One of his former roommates and later associates was prepared to testify, court documents reveal, that Harris "often told him that they would become 'rich and famous' through TCNiSO and would be able to buy a large house with a pool with their proceeds." But when the feds tried to find assets to seize, they came up empty.

A US Attorney's Office forfeiture unit ran a small investigation to "determine whether there are any assets or proceeds that can be forfeited," the government told the judge, "but has not identified any. This is corroborated by the fact that Harris has had appointed counsel throughout this case."

As for the "house with the pool" that Harris hoped to buy—well, that too ended badly. "The only asset of significance that could potentially be forfeited is Harris' house, in Redmond, Oregon," said the government, "but the US Attorney’s Office’s forfeiture unit has determined that the debt on this property exceeds the current value by approximately $55,000."

An early TCNiSO app that made cable modem hacking simple

Sentencing questions

Harris' jury trial in late February was a brief affair; he was found guilty. But the interesting question was how to sentence him, and it's one that turns up with increasing frequency in "Internet prosecutions" of the last few years. How serious are these crimes?

Harris only sold his products to 15,000 customers over the course of TCNiSO's operation, so the business was never a massive one. Charter, the only Internet provider even interested in calculating losses in the case, only came up with a $300,000 estimate.

The government called TCNiSO the largest operation of its kind and requested that Harris spend 70 months in jail and pay $152,000 (half of Charter's estimated loss) in restitution. While that might sound harsh, it's actually at the low end of federal sentencing guidelines for a case of this kind. (Harris was convicted on seven counts of wire fraud; each carries a maximum prison term of 20 years and a possible $250,000 fine.)

Whenever we run stories of this kind, readers always have one question: why is the FBI going after relatively small-time Internet operators and trying to stick them in jail for years when the real bad guys—the white-collar geniuses who helped flush our collective economy down the toilet—so often avoid jail and even prosecution altogether?

To these people, Harris' public defender, himself a government employee, may become a new hero. In his sentencing memo, Boston federal defender Charles P. McGinty wrote:

It is perhaps appropriate to comment on the disparity of treatment of Harris in the context of DOJ’s [the Department of Justice's] disinclination to use criminal process against more significant targets. In recent years, the Department of Justice has resolved investigations of dozens of Fortune 500 companies via deferred prosecution agreements and non-prosecution agreements, where, instead of facing criminal charges, companies find an amicable way of avoiding this consequence. Examples abound...

Not only that, he said; crime should not be too harshly judged when it is common in a community, lest one person unfairly get hammered while millions go free. As McGinty noted, "several prospective jurors voiced concerns whether this was [even] a crime, and many had actually participated in related offense conduct."

He asked the judge for a much lighter sentence of one year and a day in prison.

The judge in the case had a few months to think it over; this week he ruled. The Boston Globesent a metro reporter to the sentencing, who reported that Judge Mark Wolf told Harris, “I think you committed a very serious crime.”

But he didn't see it quite as seriously as the government did. Harris got 36 months in jail, a $50,000 fine, and $152,000 in restitution to Charter.

Yesterday, Harris appealed.

Vendetta

The sentence will certainly alter Harris' life. His attorney notes that he currently has a work-from-home job "doing customer service and addressing server support issues." The job will no doubt be terminated when he enters prison.

Harris married a Hong Kong woman, even moving to Hong Kong for a year with her after she was initially denied entry to the US and had to apply for a visa. "She is largely dependent on him," wrote Harris' lawyer, "cannot drive, and fears life without him." He adds that Harris has learned his lesson and "the nature of the offense is unlikely to be duplicated."

Given all that was at stake, why did Harris take the risk he did? According to his former roommate, Harris wasn't just in it for the money; he "frequently said that he hated the cable companies," starting TCNiSO as a form of payback to those who would control people's Internet access.

The government concurred, arguing in its trial brief that it could show "Harris benefited in an intangible way from his users' success because he was able to satisfy a long-held personal vendetta against cable companies."

And as every student of Renaissance drama can tell you—personal vendettas never end well.

Reporting based on documents from USA v. Harris et al., case 1:09-cr-10243-MLW in the Massachusetts District Court.